BEIJING: Pakistan needs to seek a bailout from the International Monetary Fund (IMF) and make “hard decisions” to avoid going back again, said Muhammad Aurangzeb, chief executive officer of Habib Bank, the country’s biggest lender.
The bank is also urging Pakistan to tap China’s nascent “panda bond” market, which enables oversees issuers to raise yuan-denominated bonds there, as soon as possible after IMF funding is secured.
“They are clearly very interested, because the overall stance the current government has is to move and diversify away from USD into RMB,” Aurangzeb told Reuters in an interview in Beijing on Tuesday.
The potential size of panda bond issuance would be equivalent to $1.5 billion to $2 billion, he said. China Development Bank and China International Capital Corp. would be HBL’s domestic partners on such a project.
Habib Bank received an RMB license from Beijing two weeks ago and is seeking approval to upgrade its representative office in the Chinese capital to a branch as soon as next year, he added.
An IMF rescue package would be Pakistan’s 13th from the multilateral lender since the late 1980s.
“The advantage of a program which IMF brings to the table is that it pushes the government to bring in their fiscal discipline and move with the reform agenda,” Aurangzeb said.
Last month, Pakistan received a $6-billion rescue package from Saudi Arabia, but officials say it still plans to seek a bailout from the IMF to avert a balance of payments crisis.
Pakistan’s foreign reserves have plunged 42 percent since the start of the year to about $8 billion, or less than two months of import cover.
“Both on the fiscal side and on the current account side, some very tough political choices need to be made,” said Aurangzeb.
These include moves to increase the tax base, boost exports — particularly to neighboring China, let the currency find its fair market value, actively work to narrow deficits, and get the structural reforms agenda going, he said.
“If they can do that, they can get on a more sustainable path without relying on the IMF,” Aurangzeb said. “But if they don’t follow through, the likelihood is that there will be another (IMF) program.”
The focus of new Pakistani Prime Minister Imran Khan’s talks with Beijing is less about debt or loans, and more about increasing investment, industrial activity, exports to China, and the creation of local jobs, Aurangzeb said.
Khan began a visit to China late last week.
Though China is Pakistan’s closest ally, Khan has sought to rethink a signature project, the $60-billion China-Pakistan Economic Corridor, a flagship of Beijing’s vast Belt and Road Initiative.
Pakistan needs IMF bailout, make ‘tough political choices’ — Habib Bank CEO
Pakistan needs IMF bailout, make ‘tough political choices’ — Habib Bank CEO
Saudi ports brace for cargo surge as shipping lines reroute
RIYADH: Preliminary estimates suggest that several global shipping lines could reroute part of their operations to Saudi Arabia’s Red Sea ports, potentially adding 250,000 containers and 70,000 vehicles per month, according to Rayan Qutub, head of the Logistics Council at the Jeddah Chamber of Commerce, in an interview with Al-Eqtisadiah.
“Any disruption in the Strait of Hormuz not only affects maritime traffic in the Arabian Gulf but could also reshape global trade routes,” Qutub said, highlighting the strait’s status as one of the world’s most critical maritime chokepoints for energy and goods transport.
With rising regional tensions, international shipping companies are reassessing their routes, adjusting shipping lines, or exploring alternative sea lanes. This signals that the current challenges extend beyond the Arabian Gulf, impacting the global supply chain as a whole.
Limited impact on US, European shipments
The effects of these developments will not be uniform across trade routes. Qutub noted that goods from China and India, which rely heavily on routes through the Arabian Gulf, are most vulnerable to disruption. In contrast, shipments from Europe and the US typically traverse western maritime routes via the Suez Canal and the Red Sea, making them less susceptible to regional disturbances.
Saudi Arabia’s strategic location, he emphasized, strengthens the resilience of regional trade. The Kingdom operates an integrated network of Red Sea ports — including Jeddah, Rabigh, Yanbu, and Neom — that have benefited from substantial infrastructure upgrades and technological enhancements in recent years, boosting their capacity to absorb increased cargo volumes.
Red Sea bookings
Several major carriers, including MSC, CMA CGM, and Maersk, have already opened bookings to Saudi Red Sea ports, signaling a shift in operational focus to these strategically positioned hubs.
However, Qutub warned that rerouted shipments could increase sailing times. Cargo from Asia, which normally takes 30-45 days, might now require longer voyages via the Cape of Good Hope and the Mediterranean, potentially extending transit to 60-75 days in some cases.
These changes are also reflected in rising shipping costs, driven by longer routes, higher fuel consumption, and increased insurance premiums — a typical response when global trade patterns shift due to geopolitical pressures.
Qutub emphasized that Saudi Arabia’s transport and logistics sector is managing these developments through coordinated government oversight. The Ministry of Transport and Logistics, the Logistics National Committee, and the Logistics Partnership Council recently convened to evaluate the impact on trade and supply chains. Regular weekly meetings have been established to monitor developments and implement solutions to safeguard the stability of supplies and continuity of trade.
He noted that the Kingdom’s logistical readiness is the result of long-term strategic investments, encompassing ports, airports, road networks, rail systems, and logistics zones. Today, Saudi logistics integrates maritime, land, rail, and air transport, enabling a resilient response to global disruptions.
Qutub also highlighted the need for the private sector to continuously review logistics and crisis management strategies, develop alternative plans, and manage strategic stockpiles. Such measures are essential to mitigate temporary fluctuations in global trade and ensure smooth supply chain operations.
